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Big Bets
By Marjorie Preston
As more U.S. states launch legal sports betting, operators and suppliers are flooding the field in search of some action
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or decades, U.S. lawmakers and sports leagues resisted legal sports betting for fear it would be a corrupting influence on leagues and players. Blocking the action was New Jersey Senator and former NBA star Bill Bradley, who claimed legal bets would turn each athlete into “a roulette chip.” Bradley’s 1992 Professional and Amateur Sports Protection Act (PASPA) made the activity a nonstarter for state legislatures, but the wagers kept rolling thanks to neighborhood bookies and offshore black marketers. In 1999, the National Gambling Impact Study Commission estimated that illegal betting generated $80 billion to $380 billion a year. In May 2018, the U.S. Supreme Court nullified PASPA, opening the door to legal sportsbooks on a state-by-state basis. And the big game was on. In the first full year of New Jersey’s legal market, bettors placed more than $2.9 billion in wagers, of which $22.6 million went to the state. Since then, the industry has skyrocketed, in spite of the pandemic, which shut down major sports and reduced U.S. fans to betting on darts and table tennis. In August, with pro sports back in full swing, Garden State gamblers set a record for the most money bet on sports in a single month—$668 million, up 56.7 percent over August 2019. “New Jersey was the first domino,” says Brian Wyman, senior vice president of operations and data analytics for The Innovation Group. “And given the results there, I’m not surprised that we’re in the place that we are now.”
political parties and even retail gaming operators. Sports leagues, while condemning the industry for decades, didn’t understand the benefits that working with the betting industry could bring.” The light began to dawn in 2014, when NBA Commissioner Adam Silver wrote an op-ed in The New York Times calling for sports betting to be “brought out of the underground and into the sunlight, where it can be monitored and regulated.” “This article got the conversation started,” says McDowell, “and it was pure economics that took over from there.” Among the first providers in New Jersey was iGaming supplier GAN, which originated in Europe but had been scoping the landscape since 2013, when state lawmakers OK’d online casinos. “The Supreme Court decision … had been building for a while, and equally importantly, there was a groundswell of alignment and a pretty big shift in the mindset from the leagues, the general population and all the stakeholders within the industry,” says GAN Chief Commercial Officer Jeff Berman. “We saw it coming, and as a company made the very conscious decision to focus exclusively on the United States in anticipation of legal sports and casino betting.” Today, 20 U.S. states offer legal sports betting, and eight more have legislation that would introduce the activity.
Keeping Score
In New Jersey alone, more than two dozen mobile and retail sportsbook operators have staked a claim, with European sportsbooks and suppliers AmerSo, what happened to change the perception of sports betting in the U.S.? icanizing their models to serve the exploding U.S. market. Plenty of upstarts Dave McDowell, CEO of FSB Technology, a London-based gaming are challenging the bricks-and-mortar casinos and market leaders like Fansoftware company, says it came down to “education across sports leagues, Duel and DraftKings. “I see DraftKings commercials in Nevada, where DraftKings doesn’t even operate yet,” says Berman. “Their marketing spend is astronomical, and we’re “New Jersey was the first domino. seeing that reflected in their top line. Over time, as it And given the results there, I’m not focuses more on profitability, its competitors will become better capitalized, form better media partnersurprised that we’re in the place ships and be able to better compete in the advertising that we are now.” space.” —Brian Wyman, Senior Vice President of Operations and Nowadays, it’s hard to keep track of the overlapData Analytics, The Innovation Group ping partnerships among leagues, media outlets and sportsbooks: DraftKings’ dance card includes the New York Giants, the Denver Broncos, the PGA
‘Pure Economics’
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Global Gaming Business NOVEMBER 2020
